Wednesday, February 22, 2012

How the Game Arcade Scam Works

Arcade gambling addiction is no laughing matter, as news headlines attest. Victims can end up losing their shirt, and it isn't because of the gambling machines themselves. The percentage of wins in slot machines is set at 90-95 percent or even above 100 percent in highly competitive areas crowded with competing arcades. That means a gamer spending W10,000 (US $1=W956) can take back at least W9,000-10,000.

Or that is the theory. In practice, the winnings come in the form of gift certificates, not in cash. If gamers want to continue gambling, they need to swap them for cash, and the exchange booths near arcades charge 10 percent as a handling fee. In other words, they hand out W4,500 for a W5,000 gift certificate: that is where the real money is made. If you start with W1 million and exchange your winnings into cash every day, you end up with only W42,000 within a month.

The handling fees fall directly to the hands of the arcade owners, who in effect operate the exchange booths. This is why experts say that efforts to crack down on adult game arcades will be cosmetic if no corresponding efforts are made to clamp down on the illegal exchange booths. Read More